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Law No. 2014-315 of March 11, 2014 reinforcing the fight against counterfeiting

Law No. 2014-315 of March 11, 2014 reinforcing the fight against counterfeiting

This client alert relates to the implications of French law No. 2014-315 of March 11, 2014.

Law No. 2014-315 of March 11, 2014 reinforcing the fight against counterfeiting

This client alert relates to the implications of French law No. 2014-315 of March 11, 2014.

Regional Capabilities:

April 16, 2014

Intellectual property scope

The observation is probably more formal than substantive. However, it should be noted that violations of geographical indications are qualified as infringements – which was not the case before: “Any violation of a geographical indication in breach of the protection afforded to it by European Union law or national law constitutes an infringement incurring its author’s liability” (Art. L. 722-1 of the Intellectual Property Code (CPI)).

Specialization of courts

The specialization trend continues. The Paris Tribunal de Grande Instance is now competent even for litigation on employee inventions.

Right of information

The right of information, excellent innovation of the 2007 law, but which gave rise to a certain number of questions, is “clarified” to use the legislator’s expression. It is specified that the communication of the concerned documents can now be requested in summary proceedings before the case is referred to the court on the merits.

Now, to assess damages, the court must take into consideration “separately”: “1° the negative economic consequences of the infringement of rights, including the loss of profits and loss suffered by the aggrieved party; 2° the moral prejudice to the latter; 3° and the profits made by the infringer from the infringement [or, in copyright matters, from the ‘infringement of rights’ ], including savings on intellectual, material and promotional investments which the infringer derives from the infringement of rights”. Points 1° and 2° are nothing out of the ordinary. On the other hand – and the judges must understand this – although these first two points refer to a traditional Article 1382 of the Civil Code type liability, point 3° must be understood as moving away from this logic. The “fruits” which the infringer may derive from its infringement are now an element to take into account in the assessment of the compensation owed. We can only regret one thing: although the judge clearly has an obligation (he “must”), the scope of this obligation remains vague (“take into consideration”). However, he now has a means to eradicate the “’fault with a view to gain”. How will he go about it?

The same question arises regarding the possibility, maintained since the 2007 reform, to award a lump-sum amount “as an alternative and at the aggrieved party’s request”. The interest of the new provision is that it states very firmly that “this amount is higher than the amount of the royalties or rights which would have been owed if the infringer had requested the authorization to use the right which it has infringed”. This confirms the traditional “indemnity royalty” which consists in increasing (often by two to five percent) the royalty normally charged in the relevant sector. However, the difference with the royalties which would have been owed still has to be sufficiently significant to eliminate what could constitute an obvious invitation to infringe. Once again, how will the judge interpret the requirement laid down? Symbolic superiority or dissuasive superiority?

Seizure relating to an infringement

The regime of seizures relating to an infringement in literary and artistic matters is brought into line with the regime of seizures in industrial matters. Seizures by police commissioners have disappeared. Now, only the “competent civil court” may order, by an ex parte order, either the detailed description, with or without taking samples, or the physical seizure of the allegedly infringing works as well as any related document.

Likewise, still in copyright matters, the absence of action on the merits within a period to be fixed by regulation is now penalized, as in industrial property matters, by the invalidity of the seizure: “If the person effecting the seizure fails, within a period fixed by regulation, to initiate a civil or criminal action on the merits, or to file a complaint before the Public Prosecutor, the entire seizure, including the description, is invalidated at the request of the seized party or third party, without the latter being required to substantiate its request and without prejudice to the damages which may be claimed” (new Article L. 332-3 CPI). It should be noted that the request for invalidity does not need to be substantiated but also that the person effecting the seizure simply needs to file a complaint with the Public Prosecutor so as not to be deemed inactive.

Statute of limitations

The statute of limitations of the various actions for recovery and for infringement relating to patents, topographies, trademarks, etc. is increased from three to five years.

Customs

There are significant changes here (which cannot all be detailed). First, the law extends the definition of infringements to include in the list of prohibited acts exportations in the cases where they were not included previously as well as “transshipments”. Whereas the Nokia case (ECJ Dec. 1, 2011, cases C-446/09 and C-495/09) offers immunity to goods in transit, the term transshipment must certainly be understood, even if it does not designate a customs status, as designating the direct or indirect transfer from one means of transport to another of goods which have not been offered to the consumer or placed under a customs procedure – provided the new law is not in contradiction with European Union law! That said, the law extends customs detention to all categories of intellectual property rights and, in fact, Article 38 of the Customs Code in its new version refers in general terms to “infringing goods”.

The legislator also intended to simplify the work of customs authorities – which can intervene on request or on their own initiative – by bringing into line the provisions governing the national customs detention procedures with those of regulation No. 608/2013 of June 12, 2013. And a simplified destruction procedure is set up in case of customs detention, allowing the customs authorities to destroy suspected infringing goods, without it being necessary to determine beforehand if an intellectual property right has been infringed (pursuant to a court decision), subject to the express or implicit consent of the claimant and of the holder of the goods.

It will also be noted that customs authorities are granted the right to carry out undercover operations and “pseudo purchases” which according to the Clément report (Report of the Legal Committee of the National Assembly) “for customs officers empowered for this purpose, with the authorization and under the control of the Public Prosecutor, consists in purchasing illicit products or aiding people engaged in trafficking such products, while benefiting from an exemption from criminal liability”.

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